Securities Lawyer's Deskbook
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Investment Company Act of 1940

Section 56 -- Qualifications of Directors

  1. Non-interested persons. A majority of a business development company's directors or general partners shall be persons who are not interested persons of such company.

  2. Vacancies; suspension of provisions. If, by reason of the death, disqualification, or bona fide resignation of any director or general partner, a business development company does not meet the requirements of subsection (a) of this section, or the requirements of section 15(f)(1) of this title [15 USCS § 80a-15(f)(1)] with respect to directors, the operation of such provisions shall be suspended for a period of 90 days or for such longer period as the Commission may prescribe, upon its own motion or by order upon application, as not inconsistent with the protection of investors.

Legislative History

Aug. 22, 1940, ch 686, Title I, § 56, as added Oct. 21, 1980, P.L. 96-477, Title I, § 105 in part, 94 Stat. 2280.

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